Vance leads Iran talks as oil plunges, won rallies

S&P Global cut the Philippines' outlook to stable from positive, citing heightened risks to the country's balance of payments and fiscal position from the Iran war. The Philippines declared the world's first state of energy emergency as oil prices above $80 per barrel threaten to push Q2 GDP growth below 3%. The peso has weakened toward 60 per dollar despite central bank intervention, while inflation at 2.4% has room to rise within the 2-4% target band.

The Korean won strengthened 0.8% to 1,425.25 per dollar, marking its seventh straight daily gain—the longest streak since January 2013. The KOSPI surged 6.87% to close at 5,872 as the Iran ceasefire eased energy import concerns for the trade-dependent economy. Foreign investors bought $2.8 billion in Korean stocks year-to-date, driven by AI optimism around Samsung and upcoming FTSE bond index inclusion, with MUFG targeting 1,385 per dollar by year-end.

Thai local-currency sovereign bonds have lost 4.1% since February, the worst performance after the UK among 29 global markets as inflation risks mount from oil import dependence. A prolonged Iran war could limit GDP growth to less than 1% this year, while government diesel subsidies cost 1.3 billion baht daily and can only last one month before staged price increases. Every 10% oil rise above $72 per barrel lifts headline inflation by 0.8 percentage points, potentially reaching 1-2% in 2026.

New Zealand's central bank held rates at 2.25% but Governor Anna Breman warned of "decisive and timely" increases if core inflation accelerates, with the bank now forecasting annual inflation spiking to 4.2% in June—well above the 3% target ceiling. The Middle East conflict has "materially altered" the outlook, disrupting oil, gas and petrochemical supplies critical to transport and agriculture. The RBNZ cut rates 325 basis points since August 2024 but supply chain disruptions may force a hawkish pivot.

Assembly elections in four Indian states are testing PM Modi's foreign policy credentials as the rupee fell 4% following the February US-Israeli bombing campaign against Iran, compounding a 5% decline from Trump's 2025 tariff war. Modi's traditional brand as a foreign policy strategist who elevated India globally faces scrutiny after New Delhi was sidelined in diplomatic efforts, with Pakistan taking a leading role. The PM announced seven inter-ministerial groups to assess energy and supply chain implications amid panic buying at fuel pumps.

The Student Loans Company is demanding immediate repayment of £190 million from 22,000 students who were incorrectly issued maintenance loans for weekend-only courses at 15 franchised university providers. The courses were misclassified as distance learning when they should have been ineligible for maintenance support, affecting institutions including London Metropolitan and Solent University. Education Secretary Bridget Phillipson accused universities of "incompetence" while students who signed up "in good faith" face direct debit plans for thousands of pounds and are considering legal action.

Trump's two-week Iran ceasefire has exposed deep fractures within his base, with hawks like Laura Loomer calling the deal "legitimizing terrorists" while isolationists including Tucker Carlson and Nick Fuentes (1.3M X followers) criticize prioritizing Israel over America First. The split reflects broader tension between Trump's campaign promise to end endless wars and his administration's hawkish approach that killed over 3,000 civilians since February 28.

President Trump argued the US imports "almost no oil" through the Strait of Hormuz and urged NATO allies to reopen the waterway themselves, despite gasoline averaging over $4 per gallon nationwide. While EIA data shows the US imports about 7% of crude from the Gulf, analysts warn global market shocks still impact American consumers through interconnected pricing and supply chains, calling Trump's stance "hollow" leverage against reluctant allies.